Economy growth 'better with Labour'

Saturday 24 April 2010 00:01 BST

UK has improved its standing for economic growth under Labour, research shows

The UK has improved its standing for economic growth among top nations under Labour even though output has expanded at a slightly slower pace than under the previous period of Conservative rule, research has suggested.

A study by the National Institute of Economic and Social Research (NIESR) found UK output has grown at 2% a year under Labour, compared with 2.2% in the period from 1979 to 1997.

However, the group said when the figures are adjusted for population increases, Britain has risen to second place in a table of growth rates among the world's top seven developed nations under Labour, from third place under the Tories.

The UK also rose from third to second place in rankings of productivity growth, although for actual levels of productivity it remained in fourth place below France, Germany and the US.

Meanwhile, the number of people working as a proportion of those aged 15 to 64 years is higher than in 1997, but still ranks fourth among the seven countries.

NIESR criticised Labour, saying the party had not run the country "in a sustainable way".

Director Martin Weale said: "Labour has delivered an improvement in Britain's productivity performance relative to other large economies and this relative improvement has survived the recession.

"But the labour market has not done as well as one might have hoped and performance during the recession has been disappointing."

He said that a "higher level of saving is needed if income is to be sustainable".

NIESR added talk among the parties of ring-fenced spending on certain public services "make it harder to resolve the fiscal legacy of the current Government".